BREAKING: New Study Confirms that Gaming Tax Rate Higher than 20% is Counterproductive

A new study, of which GiH received an exclusive preview and which was published only moments ago, finds that in case of a gaming tax rate of 20%, a player channelling degree of 80% is on the upper limit of the expected range. Higher tax rates might result in a slower and eventually lower degree of channelling.

The study was conducted by Ecorys, one of Europe’s oldest economic research and consulting companies, which is perhaps best known for the work of its former director, Nobel Prize winner Jan Tinbergen.

According to the study, a high tax rate makes it difficult for legal operators to survive in a market in which both legal and illegal operators are active: “[…] operators in Spain (tax rate of 25%) and France (tax rate of >30%) are confronted with a sector wide negative operating result. In France, only one third of the (legal) remote gambling operators still exists after five years.” As a result, the illegal supply of (remote) gaming has actually increased in France since regulation in 2010.

Ecorys thus recommends a maximum initial tax rate of 20%. Only after the legal (regulated) market has proven to be sufficiently attractive, would there exist some potential to increase the tax rate in the future. “In that way, the likelihood of achieving the channelling objective of 80% in three years (and the underlying policy objectives) will increase,” the study concludes.

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